Standard and Poors, the infamous rating agency that downgraded the US' sovereign debt, downgraded Italy's debt a slight notch on Monday. Italy moved from A+/A-1+ to A/A-1. The Associated Press reports that Italy considers the move political.
Dow down 108 points on Monday
The Dow ended down 108 points on Monday, after slipping precipitously lower in the middle of the day, to close at 11,401. The drop was blamed on the ongoing Greek default crisis. Greece continues to seek an $8 billion bailout, according to the Associated Press, but the European leaders are hesitant to approve the measure after finding a $2.75 billion budget shortfall. A conference call was held on Monday with no outcome but more talks are expected late Tuesday. Asian markets and European markets are mixed due to the ongoing talks as well as anticipation of the two-day Federal Reserve meeting.
In the U.S. Apple becomes world's largest company
Despite the fact the the Dow was down .9 percent on Monday, Apple stock closed up 2.8 percent, according to the Associated Press. During the day, Apple hit $418.23, its highest level ever, bringing its market cap to $383 billion, more than Exxon Mobile, formerly the world's largest company. The reason for the surge has been attributed to two new phones to be released this fall. The first is the iPhone 5 to be released in the U.S. in October and the second is the enhanced iPhone 4 to be released in China. Additionally, Apple has signed an agreement with another Chinese carrier which will significantly increase its distribution in China.
Venezuela claims rights to all gold mined in its country
Hugo Chavez, the well-known ruler of Venezuela, enacted legislation that requires all gold mined in Venezuela to be owned by joint venture companies in which 55 percent of the ownership belongs to the government. Fox News reports that Chavez has repatriated $91 billion or 211 tons of gold held in banks world wide. Any disputes must be decided in Venezuelan courts. Comments from some of the largest gold mining companies, many of which are foreign-owned, were unavailable.
Airline extra fees hit $400
The airlines are profiting from the extra fees being charged to customers. An overweight bag being checked on United or Continental on an international flight will cost an additional $400. American will charge $450 if the flight is to Asia. Domestically, the standard fees have hit $43 for the first checked bag. It is now $50 to $250 to change your ticket. These fees are all being disclosed due to Transportation Department guidelines and reported on by USA Today. And the best fee of all.....the $55-$90 fee to issue your "free" frequent flyer ticket.
BofA/Merrill Economist Says Greek Default is Next
Lehman Bank of America/Merrill Lynch's economist, Michelle Meyer, believes the Greek default will be the tipping point to lead the U.S. into its next recession, according to CNBC. While the Greek default is only $60 billion or 2 percent of the total for bank claims for the U.S., it will have implications on other financial trade issues. There is trading counter party risk on derivatives held in conjunction with foreign banks, market confidence will be shattered, the central bank fund in Europed will be challenged, and money market funds will be strained by trade flows. Meyer indicates that Europe's failure to set up TARP-like reforms after the recent crash has added to the instability of the European system.
Job uncertainty near peak according to the New York Times
A Gallup study indicates that concerns over job security have once again climbed near the peak recorded during the recent recession.